Tuesday, January 18, 2011

House Leader Plans Legislation to Bring Budget of Bureau of Consumer Financial Protection under Congressional Appropriations Process

In a letter to Professor Elizabeth Warren, Rep. Randy Neugebauer (R-TX) said that he would develop legislation to bring the operating budget of the Bureau of Consumer Financial Protection under the traditional Congressional appropriations process. The new Chair of the Oversight Subcommittee of the House Financial Services Committee also also seeks more transparency regarding Bureau staffs’ meetings with financial industry executives and interactions with the SEC and Fed. He also wants to know how the Bureau plans to avoid the kind of over-regulation that could stifle innovative new products and make traditional financial products prohibitively expensive. The Chair also asks if the Bureau plans to hire over 1,000 employees, as recent reports have indicated.

Ms. Warren is currently Assistant to the President and Special Adviser to the Treasury Secretary. Reiterating an earlier request from House Financial Services Chair Spencer Bachus (R-ALA), Rep. Neugebauer asked the Special Adviser to clarify her specific duties and range of authority. He also asked for a timetable for naming a permanent Director of the Bureau

Currently, the Dodd-Frank Act authorizes appropriations for the Bureau of up to $200 million per year for FY 2010-2014. This is an optional authorization and is in addition to the approx. $400 million of annual funding provided by the Federal Reserve System. The Chair asks for the Bureau’s budget projections and whether it plans to tap the optional authority in FY 2011 or FY 2012.

Noting his discomfort with the fact that the Bureau is funded outside the traditional appropriations process, the Chair strongly believes that this arrangement diminishes the likelihood of effective Congressional oversight.

Noting that the Bureau is authorized to re-examine rulemaking from other federal agencies, the House leader asks what policies are in place to avoid duplicative or conflicting rulemakings that are currently underway at the other regulators but that will ultimately be under the Bureau’s regulatory authority. Similarly, the Bureau should disclose any policy to avoid duplicative data requests from businesses and consumers. More specifically, the Chair asks the Bureau to provide a list of all Dodd-Frank rulemaking at other agencies that could impact financial products and industries under the Bureau’s jurisdiction and whether the Bureau will revise any of those rulemaking at a later date. He also asks the Bureau to provide suggestions for Dodd-Frank implementation delays on rulemaking that the Bureau could potentially later revise.